Net sales at Lagardère Services totalled €2,829m ($3,594m) at September 30, 2012, +0.5% on a reported basis, or by +2.3% on a like-for-like basis.

 

The company said that the difference is explained by ‘a scope effect’ of -€59m/$74.9m which was notably due to a move to the equity accounting method when consolidating Relay’s businesses at Aéroports de Paris and – to a lesser extent – for Duty Free in Lyon. The foreign exchange effect was, however, slightly positive (+€10m/$12.7m).

 

Describing the first nine months of the year, the company said it benefited from ‘the solid dynamic of travel retail’, which was up +8.6% in all geographic areas. Growth was especially strong in France in duty free (+17.4% for Aelia) and Central Europe (+17.3% in Poland), but also in the UK (+12.5%) and in Germany (+10.7%). Asia also registered strong growth figures (+33%) thanks to the extension of the network.

 

Net sales in the third quarter amounted to €1,008m ($1,281m), down 0.3% on a reported basis and up +2.1% like-for-like. There was also continued evolution of the division’s activity mix, with travel retail accounting for around 56% of net sales (+3 points compared to 3rd quarter 2011), versus 44% for LS distribution (Integrated retail and Press wholesale distribution).

 

LS TRAVEL RETAIL +7.7%

LS travel retail reported a +7.7% growth, driven by the favourable trend in airport activities, especially in France (+15.9% with modernization of points of sale in Paris CDG and good TR performances at airports in the provinces) and Eastern Europe (+14.6% in Poland, thanks to good performances by duty free and also the development of foodservice activities).

 

Dag Inge Rasmussen, Chairman and CEO of Lagardère Services says the division is aiming for a top five travel retail ranking within the next four years in all three segments which he defines as duty free and luxury, news and convenience and foodservice.

 

Business also grew sharply in Asia (+27%), thanks to the development of new concepts in Singapore and new concessions won in Malaysia. 

Turning to LS distribution, this activity was down by -4.1% due to the structural decline in print products and the economic crisis in Spain. Despite this, the company says that the activity trend is improving slightly compared to the first half, thanks to a favourable comparison effect – particularly in the United States and Switzerland. Hungary and Canada also recorded +4.2% and +3.2% growth results respectively – thanks to diversification efforts.

 

Referring to the third quarter as a whole for the Lagardère Group, the company said that its activities held up well, mainly thanks to a return to sales growth at Lagardère Publishing and continued development in travel retail at Lagardère Services.

 

Third-quarter net sales totalled €1,963m ($2,494m), almost stable (-0.4% like-for-like and -1% on a reported basis). The ‘negative scope effect’ amounted to €46m ($58.4m) and was offset by a positive foreign exchange effect equal to €35m ($44.4m).

 

Aeroporti di Roma is a much underestimated business that has never reached its true potential.

 

TOTAL 9M GROUP SALES OF €5.3bn ($6.7bn)

As at September 30, 2012, net sales for the entire group totalled €5,352m ($6,798m) and were stable on a like-for-like basis (-0.3%), but declined on a reported basis (-6.2%). The difference between like-for-like and reported data is primarily due to a negative scope effect of €414m ($526m).

 

This was explained away by Lagardère Active’s disposals of PMI, and Radio activities in Russia in 2011 and, to a lesser extent, Relay’s businesses at Aéroports de Paris now being consolidated using the equity method. This scope effect was partially offset by a positive foreign exchange effect of €76m ($96.5m).

 

In terms of significant new contributors to sales and profits, Lagardère Services adds that it has consolidated its duty free position with the acquisition on September 28, 2012, of the activities of AdR Retail, enabling LS travel retail to become the exclusive operator of eight duty free/duty paid shops in Rome’s two airports of Fiumicino and Ciampino.

 

The company believes that this acquisition, ‘at a major tourist location’, represents a significant growth potential with notably important retail space extensions throughout the duration of the contract, including +50% in 2013.

 

In addition, Lagardère Services made an entrance in July in the core duty free market in the Pacific region with the acquisition of DFS Wellington in Australia and New-Zealand.

 

[Top image: London City Airport].

 

 

	Net sales (in €m)			Change
	At September 30, 2011	At September 30, 2012		Reported change 2012/2011		Like-for-like change 2012/2011
LAGARDÈRE	5,706	5,352		-6.2%		-0.3%
Lagardère Publishing	1,501	1,531		2%		-1.4%
Lagardère Active	1,074	672		-37.5%		-6.3%
Lagardère Services	2,815	2,829		0.5%		2.3%
Lagardère Unlimited	316	320		1.4%		-4.5%

 

 

	Net sales (in €m)			Change
	Q3 2011	Q3 2012		Reported change 2012/2011		Like-for-like change 2012/2011
LAGARDÈRE	1,982	1,963		-1%		-0.4%
Lagardère Publishing	601	626		4.2%		0.1%
Lagardère Active	267	222		-17%		-11.5%
Lagardère Services	1,011	1,008		-0.3%		2.1%
Lagardère Unlimited	103	107		4.1%		-3.2%